I thought it was just using up real estate on the website. I didn't think it served any real purpose for visitors on the site unless we offered a chat room so you can see who was on the site to chat with at that given time. Since we currently don't offer a live chat feature, I am not sure how useful it was for people.

By removing it, it freed up space for other blocks in that side bar.

I myself use it to see when the traffic is low before taking the site offline temporally for maintenance.

There is also the matter of privacy for some. Since there doesn't seem to be a way for visitors to opt out on being included in it or not, it could deter some from participating on the site. Of course if you are not signed in or if you sign out, you only show up as a "guest" in it.